Lawmakers and Crypto CEOs Agree House Finance Service Committee Hearing Was 'Productive and Helpful'

Most committee members came prepared and were ready to learn about cryptocurrencies and stablecoins, while the crypto witnesses represented the industry very well.

Cryptocurrency CEOs from six blockchain-based firms testified before the House Committee on Financial Services yesterday, and the most surprising outcome was how engaged and civil everyone was. It was almost as if the Capitol Cafe was only serving Happy Meals all day. There was virtually no bipartisan bickering or political posturing. The policymakers asked thoughtful questions with meaningful follow-ups while the expert fintech panel of CEOs answered candidly and thoroughly.

All speakers said they benefited from the hearing

Despite its running time of more than four-and-a-half hours -- trust me, I watched the whole thing -- every speaker praised committee Chairwoman Maxine Waters (D-CA) for organizing such a "productive and helpful" session. Chief executives from Circle, FTX, Paxos, Steller, Coinbase, and Bitfury were all in attendance with the Tether CEO being the only no-show according to Rep. Sherman.

Discussion covered the spectrum of crypto topics

A wide range of topics were covered including: environmental sustainability; customer protection; regulatory oversight; crypto competition from other countries; risks/benefits of stablecoins; threats to the dollar's status as global reserve currency; ransomware; security; transaction trackability; criminal use of cryptocurrencies, and more.

Stablecoin regulation surfaced several times

Another key area of discussion that came up at different times was what pieces of legislation Congress should consider regarding stablecoins. "Having daily attestations and periodic third-party audits to confirm that the stablecoins are backed 1:1 with regulatory oversight of that process is by far the single most important piece," said Sam Bankman-Fried, CEO of crypto exchange FTX.

That response was immediately followed by statements from the CEOs of the only stablecoin companies in attendance with their thoughts on stablecoin regulation. "Clarity on disclosure and reporting requirements, and on the reserve and liquidity requirements -- having that be a focused set of statutes -- could be extremely valuable to providing confidence to the market, providing confidence to market participants, and allowing dollar-digital currencies to flourish on the internet," said Jeremy Allaire, CEO of Circle.

CEO of Paxos, Chad Cascarilla, added "I think it's crucial for us to set a clear regulatory plan in place that creates parity across all these different products. I think it's really simple if you have a primary regulator, if you have clear reserves, you make sure to back them by cash or cash equivalent that creates a level playing field for all dollar-backed stablecoins and then they'll really be stable."

Congress still in discovery mode regarding crypto

While next steps are unclear, Rep. Sherman said in passing that another round of hearings were being scheduled that will target "academicians and others" who'll be less favorable to cryptos. It's worth noting that while several committee members expressed concerns and skepticism about the benefits of cryptos -- largely because they admittedly didn't understand the tech -- the only real crypto curmudgeon of the hearing was Rep. Sherman. "The advocates of crypto represent the powers in our society. The powers in our society on Wall Street and in Washington have spent millions, and are trying to make billions or trillions in the crypto world."

Oh well, maybe the Capitol Cafe simply ran out of Happy Meals when Sherman went through the lunch line.